August car sales skid 10% on surging rates,high fuel costs

Car sales continued to remain sluggish in August as rising interest rates,fuel costs and an uncertain economic environment made customers postpone their purchases.

Countrys top three car makers Maruti Suzuki,Hyundai Motor and Tata Motors struggled to increase sales and cumulatively reported an over 20 per cent drop to 1.03 lakh units during the month against 1.29 lakh units in the corresponding month last year,according to the data released by Society of Indian Automobile Manufacturers (SIAM).

Overall car sales registered a 10 per cent drop to 1.44 lakh during the month compared with 1.60 lakh units in August 2010. The poor sales could prompt the apex body to lower its projections for car sales to single digits for this financial year. Among the worst hit was the countrys largest carmaker Maruti Suzuki. A mix of labour trouble and tight monetary policy saw the company report a 19.2 per cent decline in sales for the month at 63,296 units against 78,351 units in the corresponding month last financial year.

Story continues below this ad

The companys Manesar facility which produces the Swift,SX4 and DZire has been witnessing a virtual lock-out for the last nine days with the company having to hire temporary workers from ITIs to bridge the acute shortage of manpower. According to the companys chairman RC Bhargava the company would clock a growth of about 6-7 per cent for the financial year.

South Korean subsidiary firm Hyundai Motor Indias sales declined nearly 8 per cent to 26,451 units from 28,601 units in the same month last financial year. The companys director (sales and marketing) Arvind Saxena had recently said that the festival season would not be enough to rev up sales significantly. The worst casualty,however,continued to be Tata Motors that saw its sales nosedive a whopping 39.45 per cent to 13,508 units against 22,312 units last financial year. According to the company,Tata Nanos sales plummeted 85 per cent in August to just to 1,202 units.

High interest rates continued to be a big problem for the industry and it is impacting the cost of finance for both companies and customers, SIAM director general Vishnu Mathur said.

The two-wheeler industry,however,continued its sales momentum. Motorcycle sales during the month grew 15.43 per cent to 8.39 lakh units against 7.27 lakh units in the corresponding month last financial year. Hero MotoCorp reported a growth of 19.56 per cent to 4.62 lakh units compared with 3.86 lakh units last year.

Story continues below this ad

Pune-based Bajaj Auto grew over 8 per cent to 2.26 lakh units in August from 2.09 lakh units in the corresponding month last year. TVS Motor posted a growth of 13.2 per cent to 56,186 units in August from 49,630 units last year. FE